Tuesday, February 5, 2008 In Transit, 2008   VOLUME 1 ISSUE 11  
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Steele Holman


Trucking Law Leadership Committee

Cargo Security
Container Security Initiative: is it working and at what cost?
by Kathleen M. McDonough and Misty R. Martin

Following September 11, the United States Customs and Border Protection ("CBP") agency was charged with the mission of developing anti-terrorism programs to help secure U.S. borders.[1]  One threat identified by the agency is containers manipulated for the purpose of terrorist attacks.  Approximately 108 million cargo containers ship 90% of the worlds manufactured good each year.[2]  Authorities fear that these containers would be used by terrorists to carry explosive devices, contaminated food, chemical agents or other weapons.[3]  To address this specific threat to border security, the CBP created the Container Security Initiative ("CSI").  The CSI is a multinational program charged with protecting containerized shipping from terrorist manipulation.[4]  The CBPs authority is unique in that examination of cargo and persons does not require search warrants, probable cause or particularized suspicion.[5] 

Elements of the Container Security Initiative.

 To implement the CSI, the CBP partners with host countries and focuses on screening containers before they are shipped to the U.S., rather than upon entry.[6]  The three core elements of the CSI are: (1) identification of high-risk containers; (2) pre-screening and evaluation of containers before they are shipped; and (3) use of non-intrusive technology to pre-screen containers rapidly without slowing down the movement of trade.[7]  In order to identify those containers that pose a potential threat, the CSI instituted a 24 hour rule.[8]  Under this rule, the receiver is required to submit manifests and bills of lading 24 hours prior to loading the shipment in a foreign port.[9]  Violations of the 24 hour rule subjects a person to civil monetary penalties, and permission to unload the materials in the United States could be delayed or denied all together. 

 Is the Initiative Working?

The initiative appears to be working.  The CSI now operates in 58 ports, and approximately 90 percent of all transatlantic and transpacific cargo imported to the United States is subject to prescreening prior to import.[10]  Yet, it is important to note that only those containers identified as potential threats are examined.[11] 

Those in the shipping and transportation industry will want to know what costs are involved and whether the CSI or the shipping entities will have to bear them.  On a positive note, it appears that the CBP recognizes and has taken into consideration the costs associated with these additional security measures.  In a written statement by W. Ralph Basham, the CBPs commissioner: CSI adds security to the movement of maritime containers to the United States, while at the same time moving those containers faster, more efficiently and more predictably through the supply chain.  The CBP maintains that the CSI should make the movement of low- risk cargo containers more efficient.[12]  The typical down time, when cargo sits at the port of export, is used by the CSI to efficiently screen containers.[13]  By performing inspections during the lag time before the container is loaded for departure, a delay in export time is not expected.[14] 

Ideally, when the cargo arrives in the U.S., it is ready for immediate release.[15]  On paper, the CSI seems like a low-cost and efficient program.  However, the threat of terrorist actions extends beyond the site of export.  Terrorists may also attempt to alter containers while in transit.  Therefore, the CBP reserves the right to further inspect the containers if necessary.[16] 

The Practical Application of the CSI.

A carrier or shipper will be best served by taking measures to avoid the cost and delay of further inspections.  Monitoring the CSI regulations and press releases is the first necessary step.  Second, those in the goods industry should consider investing in secure freight technology and smart container technology.  For example, General Electric was recently recognized for its Container Security Initiative by its creation of the CommerceGuard Security System.[17]  In 2007, the company received the Market Leadership of the Year Award in the field of container security devices.[18]  Designed to adapt to existing containers, the device utilizes a proximity sensor to detect tampering and broadcasts a signal via a radio device.  In addition to preventing and deterring terrorists, container security has the added benefit of theft prevention.  And, while this may only be an option for Fortune 500 companies from a cost perspective, smaller firms will want to inquire of their larger shipper partners as to whether these types of initiatives are being used.

Third, entities involved in global trade should consider first- and third-party participation in another CBP security initiative, the Customs Trade Partnership Against Terrorism (C-TPAT).  C-TPAT is a government program open to participants in the cross-border supply chain.[19]  C-TPAT seeks to secure and protect the worlds trade from terrorists while maintaining economic health.  Participants voluntarily agree to abide by the CBPs security criteria.  In exchange, participants are provided incentives and benefits, such as reduced border time and a decreased number of inspections by the CBP.[20]  Currently, there are over 7,000 certified members including importers, carriers, brokers and forwarders, terminal operators and manufacturers. 

Based upon a comprehensive 2007 cost/benefit survey of C-TPAT participants, participation appears to be beneficial.[21]  In exchange for program participation, members reported that the most important benefit of the program was the reduction in the amount of time and cost of getting cargo released by the CBP.  Approximately one-third of participants reported that the number of inspections decreased by half, and participants reported an increased ability to predict head time.  Highway carriers, in turn, reported a decline in the amount of wait time. Additionally, participants reported reduced time and cost in CBPs secondary cargo inspection time, improved brand image, a competitive edge, peace of mind, a heightened awareness of and enhanced security and an overall reduced disruption in the supply chain. 

Finally, priority for cargo inspections may be given to C-TPAT members.[22] Currently, participation in C-TPAT is voluntary; however, some members are now requiring their business partners to participate.  Not surprisingly then, some report that participating in C-TPAT gives companies a competitive edge.

The most significant cost of participation reported was the initial cost of implementing physical security measures.  However, overall, more than half of the surveyed participants agreed that the benefits of participating in the C-TPAT equaled or outweighed the costs.


Carriers, shippers and transportation brokers will undoubtedly face a difficult transition period in adopting the CBPs requirements.  Yet, the associated costs are primarily borne at the initial adjustment stage and will clearly be absorbed and outweighed by the subsequent benefits of CBP.  Entities need to stay ahead of any CBP and C-TPAT developments through regular monitoring of the CBP website and associated press releases.  These steps will ensure that relatively straightforward and timely measures can be instituted and maximized by both carriers and shippers alike.

Kathleen M. McDonough
Misty R. Martin\
Segal McCambridge Singer & Mahoney
Chicago, IL

[1] U.S. Customs and Border Protection Press Contact CSI In Brief, (Oct. 3, 2007), available at http://www.cbp.gov/sp/cgov/border_security/international_activities/csi/cis_in_brief.xml.

[2] U.S. Customs and Border Protection CSI Fact Sheet, (Oct. 2, 2007).

[3] Bowman, Gregory, Thinking outside the border: Homeland Security and the Forward Deployment of the U.S. Border, 44 Hous. L. Rev. 189, 201 (2007).

[4] CBP Container Security Initiative, 2006-2011 Strategic Plan, (statement of CSI Commissioner W. Ralph Basham).   

[5] CBP Container Security Initiative, 2006-2011 Strategic Plan.

[6] U.S. Customs and Border Protection CSI Fact Sheet (Oct. 2, 2007).

[7] U.S. Customs and Border Protection Press Contact CSI In Brief, (Oct. 3, 2007).

[8] CBP Container Security Initiative, 2006-2011 Strategic Plan.

[9] Id..

[10] U.S. Customs and Border Protection Press Contact CSI In Brief, (Oct. 3, 2007).

[11] Id.

[12] U.S. Customs and Border Protection Press Contact CSI In Brief, (Oct. 3, 2007).

[13] Id.

[14] Id.

[15] Id.

[16] Id.

[17] Frost & Sullivan Press Release, May 7, 2007 available at http://www.gesecurity.com/GESecurity/PressRelease/Frost%20and%20Sullivan%20Award%20Release%20-%203-May-07.pdf

[18] Frost & Sullivan Press Release, May 7, 2007 available at http://www.gesecurity.com/GESecurity/PressRelease/Frost%20and%20Sullivan%20Award%20Release%20-%203-May-07.pdf

[19] U.S. Customs and Border Protection Customs-Trade Partnership Against Terrorism Fact Sheet (June 2007). 

[20] Id. 

[21] Cost-Benefit Survey of C-TPAT: prepared by the Center for Survey Research, University of Virginia and the Weldon Cooper Center for Public Service, University of Virginia, (Aug. 31, 2007). 

[22] The C-TPAT and CSI Supply-Chain Security Initiatives Today, Metropolitan Corporate Counsel, Northeast Edition, SECTION: Pg. 17 Vol. 15 No. 10 (October 2007).



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